Soaring fuel costs, critical fertilizer shortages, and the looming threat of a weak monsoon are converging to push Nepal to the precipice of an unprecedented and devastating food security crisis.

When Krishna Paudel opened the P&P Brothers Food Industry in Bhangal, Kathmandu, in 2017, he established a strict business policy: sell rice at a fixed, reliable price year-round, regardless of fluctuating paddy costs. For nearly a decade, he kept his promise to his community. But today, the veteran of the food business can no longer hold the line. A sharp, unrelenting rise in fuel prices has sent transportation and raw material costs soaring, forcing him to break his long-standing commitment.

“In just two months, transportation costs jumped by two to three rupees per kilogram, and paddy prices spiked significantly,” Paudel laments. “It is simply no longer possible to stand by the pledge we made.” The price of Basmati paddy alone has surged by Rs 700 per quintal, reaching Rs 7,900. Paudel’s predicament is not an isolated incident; it is a glaring symptom of a much larger, multifaceted crisis quietly sweeping across Nepal.

Behind the rising price tags in local grocery stores lies a complex web of international geopolitics and environmental shifts. A new wave of global conflict – primarily the escalating war involving the US, Israel, and Iran in the Gulf region – coupled with an impending climate disaster, threatens to cripple Nepal’s domestic food production and push millions of its citizens toward hunger.

The Ripple Effect of Global Conflict

For Nepal, a landlocked nation heavily dependent on imports, international turmoil rarely stays outside the country’s borders. The current surge in food prices is inextricably linked to the skyrocketing cost of petroleum. Following the US and Israeli strikes on Iran in early 2026, the price of crude oil leaped past the $100 per barrel mark. With the Strait of Hormuz  – a crucial artery for 20 per cent of the world’s crude petroleum – facing blockades and disruptions, the economic shockwaves have directly hit the Nepali economy.

In mere months, the Nepal Oil Corporation has been forced to hike fuel prices by roughly 40 per cent. Petrol in Kathmandu has skyrocketed to Rs 217 per litre, while diesel hit Rs 225. Aviation fuel, critical for supplying food to Nepal’s remote, mountainous districts, has more than doubled to Rs 269. According to economist Nishant Khanal, a 10 per cent rise in petroleum prices typically drives overall inflation in Nepal up by 2.2 per cent. With the rapid mechanization of Nepal’s agricultural sector over the past decade, machinery like tractors and threshers now rely heavily on expensive diesel, drastically inflating the cost of farming.

Furthermore, the Gulf conflict threatens the very backbone of Nepal’s economy: remittances. An estimated 1.7 million Nepalis work in the Gulf, sending home funds that account for a third of the country’s Gross Domestic Product. Any destabilization in their employment could plunge countless dependent families into poverty, severely eroding their purchasing power just as food prices peak.

Fertilizer Shortages Threaten Harvests

If exorbitant fuel costs are lighting the match, a severe shortage of chemical fertilizers is fanning the flames of the crisis. Global methane gas supply disruptions sparked by international conflicts have sent urea prices soaring by 60 per cent globally. The World Bank has warned that farmers’ purchasing power for fertilizers is at its weakest since 2022.

In Nepal, the situation is particularly dire. The country requires around 800,000 metric tons of chemical fertilizer annually but typically faces a deficit of 300,000 tons even in stable years. This year, the crisis has deepened exponentially. “Due to global supply issues, it is estimated that production could drop by up to 50 per cent,” warns food security expert Yamuna Ghale.

While the Nepali government recently approved a government-to-government agreement to import 80,000 tons of fertilizer from India, India is battling its own severe shortages. A drop in Indian agricultural output spells double trouble for Nepal, which imported Rs 21.5 billion worth of rice and paddy from its southern neighbour last year.

A Looming Climate Crisis: The El Niño Effect

As if economic and supply chain hurdles were not enough, nature is also dealing a heavy blow to Nepal’s agricultural sector. The World Meteorological Organization has forecast below-normal rainfall and intense heat across South Asia for the crucial June-to-September monsoon season.

This distressing forecast is driven by the ‘El Niño’ weather pattern, which historically triggers widespread droughts in the region. Meteorologists project that rainfall in Nepal will be 8 to 15 per cent below average, with the critical late-May to late-July window potentially seeing only half of its normal precipitation.

This is a catastrophic projection for a country where 60 per cent of cultivable land lacks proper irrigation facilities and relies entirely on seasonal monsoon rains. Paddy, the staple crop that feeds two-thirds of the population, is grown on nearly half of Nepal’s arable land. A weak monsoon could slash domestic paddy production by an estimated 10 per cent this year, creating a gaping hole in the nation’s food supply.

Urban Vulnerability and Long-term Impacts

While rural farmers bear the brunt of production challenges, urban centres are entirely exposed to supply chain collapses. Provinces like Bagmati, Koshi, and Gandaki – characterized by large urban populations deeply reliant on market-bought food – are at the highest risk. “Because these provinces depend entirely on the market, a major crisis will hit as soon as there is a disruption in the supply system,” explains Ghale.

The impending food insecurity threatens the nation’s future. Prolonged malnutrition driven by unaffordable, low-quality food will have irreversible, long-term impacts on public health and human capital development, particularly among marginalized and low-income communities.

Moreover, severe food insecurity can compromise Nepal’s national sovereignty. In a desperate bid to secure food aid or favourable trade deals to stave off starvation, the nation could be forced to make political or economic compromises on the international stage.

The true weight of this multifaceted crisis has yet to be fully felt, as the market is currently surviving on older food stocks. However, when the combined forces of exorbitant fuel, fertiliser scarcity, and a parched monsoon hit this year’s harvest, the crisis will move directly from the barren fields to the kitchen tables of millions of Nepalis.